Conflicts of Interest 2018 Clerks Certification Institute Norma Houston February 13, 2018 WARNING!!! If you have a question . . . . . .contact your attorney or the SOG! Ethics In Government Whose interests do you serve? www.sog.unc.edu Page 1 Norma Houston UNC School of Government
Citizens want public officials who will promote the public interest Not their own personal or financial interest Ethics vs. Law If people act legally are they also acting ethically ? If you can do it, does that mean you should do it? www.sog.unc.edu Page 2 Norma Houston UNC School of Government
Ethics vs. Law Who decides when a public official has acted unethically? Citizens Ethics vs. Law Who decides when a public official has acted unethically? The press Ethics vs. Law Who decides when a public official has acted unethically? The public official www.sog.unc.edu Page 3 Norma Houston UNC School of Government
Ethics vs. Law Who decides when a public official has acted unethically? Other public officials You Have A Choice You have a choice about how to act; you should evaluate legal and ethical factors in deciding how to act Deciding How to Act: Two Questions Is it Your Is it legal? ethical? Decision www.sog.unc.edu Page 4 Norma Houston UNC School of Government
WHAT IS A CONFLICT OF INTEREST? WHAT DO YOU THINK? What is a Conflict of Interest? When personal interests are in conflict with public interests Brother’s Business Can you purchase office supplies for your unit from your brother’s office supply store? 1. Yes 2. No www.sog.unc.edu Page 5 Norma Houston UNC School of Government
Surplus Property Can you buy items that are sold at your unit’s surplus property auction? 1. Yes 2. No Board Member Contract Can your unit contract with your board chair’s spouse to perform consulting services? 1. Yes 2. No Employee Contract Can your unit contract with your husband’s company to perform consulting services? 1. Yes 2. No www.sog.unc.edu Page 6 Norma Houston UNC School of Government
Free Lunch Can a vendor who is not currently under contract with your unit take you to lunch? 1. Yes 2. No Conference Reception Can you eat and drink at a conference reception sponsored by a vendor under 1. Yes contract with your unit? 2. No Employee Appreciation Can you ask a vendor under contract with your unit to donate biscuits for an employee 1. Yes appreciation breakfast? 2. No www.sog.unc.edu Page 7 Norma Houston UNC School of Government
Happy Holidays Can you enjoy the holiday basket goodies sent A. Yes to your office by a vendor doing business with your department? B. No Retiring Member’s iPad Can your county/city give a retiring A. Yes commissioner/councilmember her government- issued iPad as a going-away present? B. No Neighbor Contractor Can you tell your neighbor about a potential bidding opportunity with your unit? 1. Yes 2. No www.sog.unc.edu Page 8 Norma Houston UNC School of Government
LEGAL REQUIREMENTS UNDER STATE LAW Legal Requirements All Public Officials & Local Governing Board Members: Employees: Self-benefiting prohibited Ethics Training Gifts and favors Local Ethics Codes prohibited Misuse of confidential information prohibited Other public office offenses (embezzlement, bribery, etc.) Sources of Legal Standards Remember the Federal “Most Restrictive Law Rule” State Law Local Code of Ethics www.sog.unc.edu Page 9 Norma Houston UNC School of Government
Ethics Legal Requirements 1. Conflicts of Interest / Self Benefiting Ethics Legal Requirements 2. Gifts & Favors Ethics Legal Requirements 3. Insider Trading www.sog.unc.edu Page 10 Norma Houston UNC School of Government
CONFLICTS OF INTEREST IN PUBLIC CONTRACTING Direct contracting 1. Self-Benefiting in Contracting Attempting to Influence Contracting Direct Contracting G.S. 14-234(a)(1) Making or administering a contract If you’re involved at any point in the contracting process, you’re involved in “making or administering” the contract www.sog.unc.edu Page 11 Norma Houston UNC School of Government
Direct Contracting G.S. 14-234(a)(1) Making or Direct benefit to administering you or a contract your spouse There’s a direct benefit if you or your spouse: 1. Own more than 10% of the company, 2. Receive income or commission from the contract, or 3. Acquire property under the contract Direct Contracting G.S. 14-234(a)(1) Direct benefit to Making or Class 1 administering you or misdemeanor* & a contract your spouse void contract* *Unless an exception applies: banks and utilities, friendly condemnation, spouse employment, public assistance programs, small jurisdictions Direct Contracting Exceptions 1. Contracts with banks, savings and loans, public utilities 2. “Friendly” condemnation 3. Employment of the spouse of a public officer ( local elected & appointed officials only) 4. Payment for public assistance programs 5. “Small” jurisdictions ( local elected & appointed officials only ) www.sog.unc.edu Page 12 Norma Houston UNC School of Government
Direct Contracting “Small Jurisdiction” Exception (G.S. 14-234(d1)) City Population City Council under 15,000 Direct Contracting “Small Jurisdiction” Exception (G.S. 14-234(d1)) Board of Commissioners Board of Education County with no city population Mental Health over 15,000 DSS Health Direct Contracting “Small Jurisdiction” Exception (G.S. 14-234(d1)) Board of Commissioners Board of Education County with no city population Mental Health Mental Health Only if: over 15,000 Physician Pharmacist DSS DSS Dentist Optometrist Vet Nurse Health Health www.sog.unc.edu Page 13 Norma Houston UNC School of Government
“Small Jurisdiction” Exception G.S. 14-234(d1) Limits on Scope: Procedural Requirements: Approved at regular Total contract amount board meeting must be under $40,000 Declared on annual in a 12-month period ($20,000 for medical audit services) Publically posted Contracts for purchases No participation or or construction must be voting by conflicted under $30,000 official Attempting to Influence Contracting G.S. 14-234(a)(2) Someone Direct benefit to Attempt to involved in Class 1 you or influence making or misdemeanor your spouse administering Doesn’t have to be a contract you make or administer! No exceptions! Brother’s Business Can you purchase office supplies for your unit from your brother’s office supply store? 1. Yes 2. No www.sog.unc.edu Page 14 Norma Houston UNC School of Government
Surplus Property Can you buy items that are sold at your unit’s surplus property auction? 1. Yes 2. No Board Member Contract Can your unit contract with your board chair’s spouse to perform consulting services? 1. Yes 2. No Employee Contract Can your unit contract with your husband’s company to perform consulting services? 1. Yes 2. No www.sog.unc.edu Page 15 Norma Houston UNC School of Government
GIFTS & FAVORS Gifts from Contractors 2. Gifts & Favors Gifts for Influencing Contracts What is a Gift? “Something voluntarily given by one person to another without compensation.” - Webster’s Dictionary www.sog.unc.edu Page 16 Norma Houston UNC School of Government
Gifts and Favors from Contractors G.S. 133-32 Prohibited Giver: Contractor or vendor who is: 1. Past (within 1 year) 2. Current 3. Potential future = Class 1 misdemeanor, unless an exception applies Gifts and Favors from Contractors G.S. 133-32 Prohibited Recipient: Public officer or employer who: 1. Prepares plans or specifications for public contracts, or 2. Awards or administers public contracts, or 3. Inspects or supervises construction = Class 1 misdemeanor, unless an exception applies Gifts and Favors from Contractors G.S. 133-32 Exceptions: Professional Honoraria Souvenirs Banquets Organizations Family / Friends Honoraria www.sog.unc.edu Page 17 Norma Houston UNC School of Government
Gifts and Favors from Contractors G.S. 133-32 Exceptions: Professional Honoraria Souvenirs Banquets Organizations Family / Friends Souvenirs / advertising items of nominal value Gifts and Favors from Contractors G.S. 133-32 Exceptions: Professional Honoraria Souvenirs Banquets Organizations Family / Friends Meals at banquets Gifts and Favors from Contractors G.S. 133-32 Exceptions: Professional Honoraria Souvenirs Banquets Organizations Family / Friends Gifts to professional organizations www.sog.unc.edu Page 18 Norma Houston UNC School of Government
Gifts and Favors from Contractors G.S. 133-32 Exceptions: Professional Honoraria Souvenirs Banquets Organizations Family / Friends Non-business customary gifts from friends or family (must be reported to agency head) Gifts for Influencing Contracts G.S. 14-234(a)(3) Someone Solicit or Attempt to involved in Class 1 receive a gift influence making or misdemeanor or favor administering Doesn’t have to be a contract you or your spouse benefit from! No exceptions! Gift Ban Tip FOLLOW THE MONEY! When trying to decide if gift is given by a prohibited giver, identify who is paying for it www.sog.unc.edu Page 19 Norma Houston UNC School of Government
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